Techonomy: How to Generate Jobs in the New Economy

Following a debate on the role of technology in the economy, Techonomy held a conversation about jobs in the U.S. featuring Forbes Media Chairman Steve Forbes and Revolution Chairman and CEO Steve Case.

Although some jobs have been created in the recession, it hasn't been enough, said moderator James Manyika of McKinsey. Fourteen million Americans are seeking employment, about half of who are under 35. The unemployment figures vary by education and sector. In general, college educated people and those in health care and education see stability, but those with less education or in sectors such as construction and real estate, find real problems.

Manyika said these problems have long existed, but were exacerbated by the recession. After a recession, employment rates usually rebound in a matter of months, though this time it is taking much longer. America needed to add 21 million jobs over the past decade just to keep up with population growth.

Steve Case of Revolution urged the audience to get involved by backing entrepreneurship in local communities and in legislation. The story of America is the story of entrepreneurship, he said, and one issue is that there are actually fewer startups now than there were several years ago. He suggested we need to "win the global battle for talent" (allowing the right people to immigrate), relax provisions around capital formation, and change regulations around IPOs. When AOL went public, most companies were smaller, and that's hard for small companies to do under today's regulations. Big companies also often take input from smaller ones.

Forbes pointed to monetary policy as the big problem; without a stable currency, you won't get growth. People will spend money on the wrong things such as commodities and land, rather than invest in the future. We need to reform the tax code, Forbes asserted, by promoting a flat tax, as he long has supported. America has too many regulations in education and health care; we need free markets in those areas. He complained that when you go to a clinic, you don't know what it will cost ahead of time. He predicted within five years, the dollar would be re-linked to gold.

All of the net jobs are created by high-growth entrepreneurial companies, Case said, and the government has to create regulations that encourage such companies. Most entrepreneurial companies do not get venture capital and are not in technology.

Forbes said by reducing and eliminating capital gains taxes, more money goes into startups. He believes we can grow without a big push in manufacturing since globalization and specialization have always led to jobs and growth.

Job creation could happen quickly, Forbes said, by changing the tax code and tying the dollar to gold, which most economists hate. Case said it would take longer, as we need a big change in the education system. In the meantime, we need more entrepreneurship, including more manufacturing.

From the audience, Microsoft's Chief Research and Strategy Officer Craig Mundie said one issue is the decline in the quality of governance. It is the biggest issue the country now faces in that the government has not changed enough over the past 30 years.

Scott Cook, a founder of Inuit, suggested that the U.S. should send emissaries to other countries to see the best ways other countries run their governments, particularly how Canada handles immigration policies and the way Singapore gets more efficient agencies by trading overseas education for government jobs and paying competitive salaries.

Michael J. Miller's Forward Thinking Blog: forwardthinking.pcmag.com
Michael J. Miller is chief information officer at Ziff Brothers Investments, a private investment firm. From 1991 to 2005, Miller was editor-in-chief of PC Magazine, responsible for the editorial direction, quality and presentation of the world's largest computer publication.
Until late 2006, Miller was the Chief Content Officer for Ziff Davis Media, responsible for overseeing the editorial positions of Ziff Davis's magazines, websites, and events. As Editorial Director for Ziff Davis Publishing since 1997, Miller took an active role in...
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